Delta: Beer sales up 48% over Christmas, and these are the two sectors driving beer sales

Zimbabwe Delta
Delta: Strong beer sales from mining and infrastructure, but worry over Govt policy

If beer sales are anything to go buy, the two sectors with the most extra money to spend right now in Zimbabwe are mining and construction.

Delta Beverages, the country’s biggest brewer, says Zimbabweans drank 48% more lager beer over the quarter covering the festive period, despite the COVID-19 lockdown and weak incomes. Most of the demand is coming from mining and construction, the company says in its latest trading update.

“Consumer disposable incomes remain constrained due to restricted economic activity under COVID-19 conditions. There were positives from the payment of year-end bonuses, increased mining activity and infrastructure projects that are injecting liquidity into the market,” Delta reports.

Lager beer volume grew 48% for the quarter to December and 20% for the nine months, compared to the same period last year. Sorghum beer volume grew 29% for the quarter, but it was still 14% lower over the nine months to December compared to 2019.

There was improved market access following the relaxation of the lockdown during the quarter. For the first half of the year, Delta struggled to get its Chibuku Super into bottle stores and rural markets.

Soft drinks sales were also up by 66% over the quarter covering the holidays, as supply was better than over the same time in 2019.

“The sales mix has shifted towards take-home packs in response to the restrictions on gatherings.”

Afdis, which sells spirits and ciders, sold 37% more products in the quarter, and 25% more over the nine months.

[ALSO READ: Construction companies are big winners of 2021 budget as Govt extends infrastructure spending]

Delta on forex

According to Delta, its forex situation has improved due to two factors; the foreign currency auction and being allowed to sell their drinks in US dollars.

“The Zimbabwe economy benefited from the stability on the foreign currency auction system and liberalisation on the use of foreign currencies for domestic sales under Statutory Instrument 185 of 2020. The improved access to foreign currency has resulted in stable pricing and consistent product supply due to better access to imported raw materials and spares,” Delta reports.

The company, however, warns that business in the current quarter will be “subdued” after government tightened the lockdown due to resurgent COVID-19 cases.

“The business outturn for the fourth quarter will therefore be subdued although the Zimbabwean economy could benefit from improved access to foreign currency and lower inflation.”

Delta’s regional operations had a tougher year. In Zambia, says Delta, “the economy has experienced resurgent inflation and currency depreciation. In the face of rising cost of living, consumers are searching for cheaper alternatives.”

In South Africa, Delta’s United National Breweries suffered a year-on-year volume drop of 19% for the quarter as South Africa banned beer during the lockdown.